Rovuma LNG Terminal

From Global Energy Monitor
This article is part of the Global Fossil Infrastructure Tracker, a project of Global Energy Monitor.
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Rovuma LNG Terminal is a proposed LNG terminal in Cabo Delgado Province, Mozambique.

Location

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Project Details

  • Operator: Mozambique Rovuma Venture
  • Parent: ExxonMobil (28%), Eni (28%), CNPC (14%), Galp (10%), KOGAS (10%), and Empresa Nacional de Hidrocarbonetos (10%)[1]
  • Location: Rovuma Basin, offshore Mozambique
  • Coordinates: -10.753277, 40.798272 (approximate)
  • Capacity: 15.2 mtpa (7.6 mtpa per train)[2]
  • Status: Proposed
  • Type: Export
  • Trains: 2[2]
  • Start Year: 2025[1]
  • Financing: US$1.5 billion in political risk insurance from the U.S. International Development Finance Corporation[3]

Background

Rovuma liquefied natural gas (LNG) project is a 15.2 million tonnes per annum (Mtpa) LNG export facility planned to be developed to liquefy and market gas resources from three reservoirs in the Area 4 block of the Rovuma Basin, offshore Mozambique. Mozambique Rovuma Venture (MRV), a joint venture of ExxonMobil (40%), Eni (40%), and CNPC (20%) is the operator and holds 70% interest in the Area 4 exploration and production concession contract. Galp, KOGAS, and Empresa Nacional de Hidrocarbonetos each hold a 10% interest in the block. Eni is in charge of the construction and operation of the upstream facilities on behalf of MRV, while ExxonMobil will lead the construction and operation of the LNG and associated facilities for the deepwater Area 4 block.[1]

The Ministry of Coordination of Environmental Affairs (MICOA) of Mozambique approved the environmental impact assessment (EIA) for the Rovuma LNG project in June 2014. The development plan for the first phase of the Rovuma LNG project was submitted in July 2018, which was approved by the Government of Mozambique in May 2019. The final investment decision (FID) on the multi-billion-dollar Rovuma LNG project is expected in the first half of 2020, while the construction works are expected to be started in the same year. It's expected to be brought on stream in 2025.[1]

The first phase of the Rovuma LNG project will comprise two liquefaction trains of 7.6Mtpa each. The LNG trains will be equipped with H-100 gas turbines and liquefaction compressor units from Mitsubishi. Each dual-shaft H-100 gas turbine will have a rated capacity of 120MW. The Rovuma LNG plant will receive up to six billion cubic feet (bcf) of natural gas a day from as many as 60 production wells in Area 4 offshore block. The feed gas for the liquefaction facility will be supplied through a new 45km-long subsea pipeline corridor. The marine facilities for the project will include a multi-purpose dock (MPD) to support the primary construction activities, and an LNG export jetty with two marine loading berths to accommodate LNG carriers. The site will also feature a 1.7km-long temporary airstrip and a 3.5km-long permanent airstrip. The initial production life of the Rovuma LNG project is estimated to be 30 years.[1]

In March 2020, it was reported that disruption to construction workers as a result of the COVID-19 Pandemic combined with a heavily deflated global gas market will delay the final investment decision (FID) on Exxon Mobil's US$30 billion Rovuma LNG Terminal project in Mozambique. The FID had been expected to take place in the first half of 2020 and, according to various sources familiar with the project, the most optimistic scenario is for the project to receive formal go-ahead in the second half of 2020. One of these sources said: “COVID-19 is affecting guys going into Mozambique, it’s affecting Chinese and Korean financiers, and clearly you’ve had the arse drop out of the oil market”. Exxon itself is considering substantial cuts to its capital spending plans and operating expenses in the initial fall-out from the COVID-19 outbreak and the related shocks to global commodities markets.[4] On April 16, 2020, it was reported that Rovuma LNG construction site had been shut down and quarantined due to COVID-19 infections among workers.[5]

In May 2020, Reuters reported Mozambique’s National Petroleum Institute's expectation that the project's FID will be postponed to 2021. An Exxon spokesperson dismissed this as "third party speculation" while confirming that FID would not take place in 2020, but declined to give a firm date for when it would take place.[6]

Rovuma Basin

The Rovuma LNG project is based on three gas reservoirs of the Mamba complex in the Area 4 block of the Rovuma Basin. Located approximately 40km off the Cabo Delgado coast in Northern Mozambique, the Mamba gas field was discovered in October 2011. The Area 4 is estimated to hold a total of 85 trillion cubic feet (tcf) of gas reserves, out of which the Rovuma LNG project targets the development and commercialization of 21.7 Tcf of high-quality gas resources. The other major project sanctioned for development in the Area 4 is the Coral South FLNG Terminal, a 3.4Mtpa floating LNG (FLNG) project, which has been under construction since September 2018.

Financing

In September 2020, the U.S. International Development Finance Corporation (DFC) approved US$1.5 billion in political risk insurance to support the development and operation of an onshore natural gas liquefaction plant and supporting facilities in Area 4 of Rovuma Basin. [3] According to DFC, "The project will advance development across Mozambique, with significant associated GDP benefits expected to accrue to sectors beyond oil and gas." [7]

Articles and resources

References

  1. 1.0 1.1 1.2 1.3 1.4 Rovuma LNG Project, Mozambique, NS Energy, accessed April 30, 2020
  2. 2.0 2.1 2020 World LNG Report, page 102, International Gas Union, April 27, 2020
  3. 3.0 3.1 "U.S development finance institution to fund energy and gas development in Mozambique", Reuters, Sep. 10, 2020
  4. Exclusive - Coronavirus, gas slump put brakes on Exxon's giant Mozambique LNG plan Reuters, Mar. 21, 2020
  5. Iaian Esau, Entire Afungi LNG site in Mozambique under lockdown, Upstream Online, Apr. 16, 2020
  6. "Mozambique expects Exxon gas project decision next year", Reuters, Jun. 3, 2020
  7. "DFC Approves $3.6 Billion of New Investments in Global Development in Largest Quarter Ever", U.S. International Development Finance Corporation press release, Sep. 9, 2020

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